Why Investing in Next-Generation Tech is a Matter of ‘When’ and Not ‘If’

In today’s world of global competition, the key to success and survival is adopting next-generation technologies. The company that captures your customers’ attention might look nothing like you, and they will use cutting-edge technologies to do it. Just ask Whole Foods (acquired by Amazon), the taxi industry (disrupted by Uber) and the hotel industry (competing with Airbnb).

Without deploying the most sophisticated technology available, service companies like those can’t exist. There’s a misconception that manufacturers can. The truth is, the adoption of next-generation technologies will be a critical part of any manufacturer’s business strategy, not only to ensure future growth, but to survive.

The Industry 4.0 movement is taking hold in the U.S. manufacturing industry, though it has been popular in Europe for some time. The name comes from the premise that we’re entering our fourth industrial revolution, marked by nine next-generation technologies:

Systems integration

Industrial Internet of Things (IOT)

Automation & robotics

Cloud computing

Simulation

Cybersecurity

Additive manufacturing (3D printing)

Augmented reality

Big data & analytics

Some manufacturers are asking themselves whether they should embrace these technologies, and their hesitations are warranted. Adding these technologies to a manufacturer’s daily tactical execution requires a thorough analysis of return on investment (ROI), a change in established processes and buy-in from employees at multiple levels. Yet we have to accept that for any manufacturer to drive their business into the future, it isn’t a matter of “if” but “when.”

Our country’s largest manufacturers would likely tell you that the “when” is right now, starting with a self-evaluation of your company to help decide which technologies of Industry 4.0 will be most beneficial.

What to Evaluate

The questions below are straightforward, but they can be difficult to answer honestly, or to answer fully if your role isn't directly related. Consider having a few employees answer these questions independently

Step 1)

Acknowledge the pain points. What is standing in the way of success or growth? For example:

Is your challenge capacity? Do you not have the man hours available to either meet a demand or increase production?

Are rising labor costs eating into profitability?

Are there events within the supply chain that are affecting the quality of the final product?

Do you feel like your processes could be more efficient?

Step 2)

Prioritize those pain points. Ask yourself:

What needs to be addressed first? Typically this should be your greatest challenge to profitability.

Which pain point would give you the greatest ROI?

Is there a pain point that you can address that will have the greatest impact on customer satisfaction?

Is there a pain point that you can address that will have the greatest impact on employee satisfaction?

The Options

Earlier, we listed the nine next-generation technologies of Industry 4.0, but now let’s focus on the four that I see making the biggest impact for my mid-sized manufacturing customers. You will see how each technology can enable the others.

Systems Integration

This is a complex process worthy of its own article. In short, systems integration is the act of connecting multiple platforms and products to collect data, which could be pushed to a single intelligence dashboard. Then, with the ability to relate various categories of data to one another, three primary improvements can occur:

First, you can more accurately chart and understand the relationship between labor hours and output, thus increasing productivity. Second, with data collected at stages throughout the production process, you can see what’s causing quality issues and make adjustments before it becomes an epidemic. Finally, you have better control over material cost. By tracking material consumption in real time, you can investigate the cause of more material being used than estimated, or you can adjust pricing to cover the cost and protect your gross margin.

Industrial IOT

This is our growing ability to connect machines, wireless sensors and humans so they can “talk” to each other. Sensors collect data points, which are stored in the Cloud, and then analyzed by software, so that people can make informed decisions. IOT allows for system integration by taking captured data from multiple “smart” devices and aggregating that data into a business dashboard. Data alone is just data, but together and in context, you have actionable intelligence. For example, you could monitor machine diagnostics to prevent a shutdown, or track production speeds to improve processes.

Automation & Robotics

People imagine the factories of tomorrow devoid of humans, but that takes away from innovation and sometimes just good common sense. Instead, employees collaborate with robots to put human talent where it is needed: programming the machines, troubleshooting machines in operation and quality control. Another major benefit is safety. A robot with the accuracy of a tenth of a millimeter isn’t going to get its arm stuck in a piece of equipment. If it does, you aren’t dealing with a worker’s comp situation. Plus, robots can work near off-gassing and fumes, without the need for protective gear or training.

Cloud Computing

Cloud computing allows for a vast and accessible repository of data, versus virtual private networks (VPNs) that can be unwieldly and inefficient, or apps that can limit the size of data downloads. Multiple people can log in for different purposes to access tangible information aggregated through IOT and systems integration, and then make intelligent, data-drven decisions.

When Is the Right Time to Act?

There’s no time to waste to consider your options. In a world of global competition, manufactures must be focused on improved productivity, better quality products and optimization of material cost. The implementation of the Industry 4.0 technologies can be critical to the future success and sustainability of U.S. manufacturing businesses. Pull in a team to review the questions above and set your priorities. Then assess the ROI, which you can do internally, or bring in the manufacturers of these technologies who will perform an ROI analysis to get you started. Then move ahead boldly, embracing Industry 4.0, and watch your business grow.

Mick Arnold is president and fourth-generation owner of Arnold Packaging in Baltimore, Md.

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